In the course of a few years, cloud computing has moved from the fringe to the norm for businesses looking to make their operations more efficient. IDG Enterprise’s 2014 Cloud Computing Survey found that the majority of businesses today (69 percent) are using at least one cloud-based application, and investment in the technology grew nearly 20 percent over the past two years.
In the B2B space, cloud-based systems offer players the advantages of presenting data in real-time, meaning users can make adjustments on the fly and scale quickly to individual needs—whether adding new suppliers or integrating into legacy systems.
But despite the obvious benefits to the cloud, the business-to-business market is only recently starting to fully realize those advantages. It’s not an easy road – B2B companies must be wary of data security and invest in stronger IT resources to support cloud services – but the industry would be wise to take a close look at cloud technology and how it can suit its specific needs.
Saving money is the number-one benefit cited by businesses transitioning to cloud-based services. Seventy percent of executives interviewed for KPMG’s 2014 Cloud Survey Report felt moving to the cloud helped them to reduce costs. Savings come in multiple forms: for small- to medium-sized business, moving from network- to cloud-based solutions can provide an immediate reduction in capital expenditure. The expense of renting data center space, networking, electricity, cooling and other costs are all shifted to the service provider. Enterprises also save human capital. Following the implementation of cloud software, IT staff can turn their attention to other projects.
Writing for Tech Radar, Allan Leinwand, VP and CTO of Cloud Platform Infrastructure at service management company ServiceNow, said he sees the shift of IT focus away from concentrating on the individual physical components and onto the business services they deliver as a major trend that will “unleash a new era of B2B innovation” in 2015.
The business-to-business ecosystem is largely focused on how e-procurement practices can cut costs; while some companies may be reluctant to move away from
paper checks, B2B services are offering newer, cloud-based technologies that seamlessly integrate into a supply chain. Firms like AP Technology offer both paper and digital check services with cloud integration. The cost savings from companies offering cloud-based services, experts agree, largely outweigh the burden of integrating an updated payment system.
The B2B market has been slow to adopt the technology, but signs of maturity are beginning to crystalize. Half of respondents to a survey by Forrester Consulting, XO Communications and Juniper Networks, plan to move business-to-business e-commerce sites to the cloud. Businesses are showing greater trust in the cloud as they move revenue-generating operations away from traditional networks.
Cloud-based technologies can give businesses the power to react faster. Working from real-time data - instead of projections - buyers and suppliers can better manage cash flow, payments and inventories. IT departments can implement changes on an as-you-go-basis, reducing the time between concept and creation from months to weeks, or even days.
Employees can also enjoy the fluidity the cloud provides. More workers are operating outside of the traditional office environment. The number of telecommuting workers ballooned nearly 80 percent from 2005 to 2012 (the most recent information) available. Businesses and employees are reaping the benefits with both groups reporting increased productivity, higher satisfaction. Similarly, respondents to the KPMG survey reported having a mobile workforce gave them a competitive advantage.
Within the buyer/supplier relationship, companies can use the cloud to keep a watchful eye on who owes what, when invoices have been paid, and in what state their cash flow stands, overall gaining more valuable insight into real-time data.
The rapid adoption of B2B-level cloud computing doesn’t come without risk. More than half of respondents to the KPMG survey cited data loss, privacy risks and the potential for intellectual property left as the greatest challenges to shifting to the cloud. While the flexibility and manageability of the cloud attracted businesses to adoption, only 34 percent of IT professionals said they are satisfied that what was promised was delivered.
Investment to the technical infrastructure is also a must to ensure the existing technical framework can meet the new demands. After implementing cloud-based technologies, the majority of IT teams have to upgrade at least one aspect of the network—most frequently increasing bandwidth or upgrading security services.
But cloud-based applications are increasingly adding simplicity and agility to traditionally inflexible B2B communication and payments, and businesses who have adopted the technology aren’t looking back; more business plan to move more of the IT environment to the cloud in the next 18 months, according to IDG Enterprise. Migration is matched to dollars; revenues generated by the B2B cloud market are expected to top $14 million by 2020.